Economy of Punjab, India

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Economy of Punjab
GDP5.78 lakh crore (US$81 billion) (2019-20 est.)[1]
GDP rank14th
GDP growth
10.7% (2017-18)[1]
GDP per capita
153,061 (US$2,100) (2018-19)[1]
GDP per capita rank
GDP by sector
Agriculture 30%
Industry 24%
Services 46% (2017-18)[1]
Unemployment6% (2015-16)[1]
Public finances
39.7% of GSDP (2019-20 est.)[1]
-19,658 crore (US$−2.8 billion) (3.4% of GSDP) (2019-20 est.)
Revenues94,195 crore (US$13 billion) (2019-20 est.)[1]
Expenses1.58 lakh crore (US$22 billion) (2019-20 est.)[1]

According to the 2008 Global Hunger Index, Punjab has the lowest level of hunger in India. Less than one-fourth of children below the age of five are underweight.[2]

Punjab has a relatively well-developed infrastructure, including road, rail, air and river transport links that are extensive throughout the region. The state has also one of the lowest poverty rates in India at 8 percent in 2012.[3] Punjab has also seen strong economic growth, but since 2005 the state's growth has fallen below India's national average.[3]

Punjab won the best state performance award,[4] based on statistical data compiled by the Indian Government. In 2012, the state was one of the highest receivers of overall remittances to India which stood at $66.13 billion, behind Kerala and Tamil Nadu.[5]

Macro-economic trend[edit]

The chart shows the trend of Punjab's gross state domestic product of Punjab at market prices, as estimated by the Ministry of Statistics and Programme Implementation. The traditional long-term financial policy of the Union Government is to reward well-performing states.

Year Gross State Domestic Product
(Indian Rupee / Ten Million / Crores)
1980 50,250
1985 95,060
1990 188,830
1995 386,150
2000 660,100
2005 925,380 [6]
2011 2,213,320 [7]

The state's debt was estimated at 62 percent of its GDP in 2005.[8]

Major industrial cities[edit]

Dera Bassi, Jalandhar, Amritsar, Ludhiana, Patiala, Bathinda, Batala, Khanna, Faridkot, Rajpura, Mohali, Mandi Gobindgarh, Ropar, Firozpur, Sangrur, Malerkotla and Moga are major financial and industrialized cities. A big share of the state's GDP comes from these cities.


The region is ideal for growing wheat, fruits and vegetables, which is why Indian Punjab is also referred to as the "Granary of India" or "India's bread-basket." [9] It produces 37.83% of India's wheat, and 25.57% of India's rice (2018-19). The total area of Punjab is just 1.4% of total area of India, but it produces roughly 12% of the cereals produced in the country.[10] The largest grown crop is wheat. Other important crops are rice, cotton, sugarcane, pearl millet, maize, barley and fruits. Among the fodder crops are bajra and jowar. In the category of fruits, it produces abundant stock of kinnow. The main sources of irrigation are canals and tube wells. The rabi or the spring harvest consists of wheat, gram, barley, potatoes and winter vegetables. The kharif or the autumn harvest consists of rice, maize, sugarcane, cotton and pulses. Agriculture sector is the largest contributor to the gross state domestic product (GSDP) of Punjab. According to 2013-14 data, the contribution of agriculture and allied industries in GSDP at factor cost is 28.13%.


The state has an essentially agrarian economy with a lower industrial output as compared to other states of India. A prominent feature of Punjab's industrial landscape are its small sized industrial units. There are nearly 194,000 small scale industrial units in the state in addition to 586 large and medium units. Dera Bassi, Ludhiana is an important center for industry.

The industrial units in the state are broadly divided into three important sectors.

Textile industry[edit]

The state produces nearly 25% of the best quality cotton in India. In spite of several advantages, there is one major disadvantage that the total spindlage capacity of the state is only 1.5% of the country. Dera Bassi, Ludhiana is known as manchester of India. Batala was once called the "Iron bird of Asia" as it produced the highest amount of C.I. casting, agricultural and mechanical machinery. Batala is still one of the leading cities in Northern India in manufacturing of C.I. casting and mechanical machinery. It's also an agricultural marketplace and industrial center. Cotton ginning, weaving, sugar refining and rice milling are some of other important industries of the region.

The cotton mills are located at Abohar, Malout, Phagwara, Amritsar, Kharar, Mohali and Ludhiana. Malerkotla, Abohar, Malout and Bhatinda are important for cotton ginning and pressing nearly 25.3 million (25,300,000) bales of cotton. About 97 million kilograms of yarn and 36.5 million metres of cloth were produced in the cotton textile mills of Punjab. But only 43% of the cotton yarn formed in Punjab is used within the states and the remaining is sold outside the state. Pesticides introduced in the Green Revolution[11] played an important part in the bustling cotton industry. The most common biopesticides in Punjab are Bacillus thuringiensis (Bt). With the introduction of Bt cotton, the total Punjab cotton area increased from 449,000 hectares in 2002 to 560,000 hectares in 2005. During this time frame, production of cotton has also increased: from 1.08 million bales (170 kg each) to 2.2 million bales, making up about 11-12% of the country's total production of cotton.[12]

Overall textile production of Punjab is predictable at Rs.105000 Million, as well as Rs.32500 Million sell abroad of knitwear, shawls, made-ups (bed sheets, pillow cases, duvet covers, and curtains) and yarns. The direct and indirect employ of textile doings in the state of Punjab is predictable at 2 Million people.

Sugar industry[edit]

The sugar mills in Punjab are located at Batala, Gurdaspur, Bhogpur, Phagwara, Nawanshahr, Zira, Morinda, Rakhra, Dhuri, Fazilka, Nakodar, Dasua, Budhewal, Budhladha, Mukerian, Tarn Taran, Ajnala, Faridkot, Jagraon, Amloh, Patran and Lauhka. Butter Sivian Near Baba Bakala One of the salient feature of the sugar industry is that out of the 22 mills, 15 are in the Co-operative sector and 7 are privately owned. Compared to the state of Uttar Pradesh and some other Indian states, the size of the sugar mills in Punjab is small. The Co-operative sugar mill at Morinda is the biggest in the state with a daily crushing capacity of 4,000 tonnes of sugarcane. Six of the cooperative sugar mills are inoperative while the remaining nine crush cane during the season.

Dairy industry[edit]

The primary source of milk and other dairy products in the state is the buffalo. The state ranks at the top in the country in the availability of milk after Haryana and Gujarat.

The milk plants are mainly located at Verka (Amristar district), Ludhiana, Mohali, Jalandhar, Patiala, Hoshiarpur, Gurdaspur, Ferozepur, Sangrur, Bhatinda, Faridkot, Nabha, Moga, Kot Kapura and Hamira. The plant at Moga is the biggest plant in the state with a processing capacity of nearly 435 thousand litres. The first AMUL milk plant of Punjab state was opened in 2015 at Batala.


Total energy of the state is provided by the PSPCL own Thermal Plants a) 1260MW GURU GOBIND SINGH SUPER THERMAL PLANT at Ropar, b) 440MW Guru Nanak Dev Thermal Plant at Bhatinda, c) 920MW Guru Hargobind Thermal Plant at Lehra Mohabbat and its own Hydro Power Plants i) 110MW Shanan Power house at Joginder Nagar,ii) 600MW Ranjit Sagar DAM at Shah Pur Kandi,iii) 91.35MW UBDC power houses, iV) 207MW Mukerian Hydel Project, v) 134MW Anand Pur Sahib Hydel Channel, vi) Mini and Micro Hydro Power Plants on Sirhind Canal. In addition to that it gets its share from Yhdro Power Plants under the control of BBMB. a) 1325MW Bhakra Dam Left and Right Bank Power Houses b) 155MW Hydro Power Plants on Bhakra Main Line at Ganguwal and Kotla, c) 396MW Hydro Power Plant at Pong, d)990MW Power Plant at Dehar. A new Thermal plant is set up in Rajpura(Punjab) with 1400 megawatt of power capacity inaugurated on 8 December 2013. Another Thermal Plant in Bathinda with capacity of 1980 Megawatt power is in planning.

The common pool projects are the Bhakra Nangal Complex, the Dehar Power Plant and the Pong Power Plant. Punjab shares about 51% of the Power generated from the Bhakra Nangal Complex. 48% from the Power generated at the Pong Project.[13]

Common pool projects[edit]

  • Bhakra Nangal Complex
  • The Upper Bari Doab Canal System (UBDC)
  • The Shanah Power House

Thermal electricity[edit]

  • Guru Nanak Dev Thermal Plant, Bathinda was completed in 1974. The Guru Nanak Thermal plant has four units of 110X4 MW capacity.
  • Ropar thermal power plant consists of six units capable of generating 210 MW each. The plant is spread over an area of about 2,500 acres (10 km²) on the banks of River Sutlej.
  • A 1980 MW thermal plant is under execution at Talwandi Sabo in Bathinda District by Sterlite industries.
  • A 540 MW thermal plant is under implementation at Goindwal Sahib in District Amritsar by GVK Power.
  • A 2640 MW thermal plant at Gidderbaha (District Bhatinda) and a 2100 MW Thermal Plant at Rajpura are in the pipeline.
  • A number of bio-mass and AGro-Waste based power plants are under construction by Private Companies in collaboration with PEDA based on renewable energy.

Business and infrastructure[edit]

Punjab has good infrastructure. Its road, rail, air and transport system is rated one of the best in the country with ranking of 210 points compared to the national average of 100 in NCAER's infrastructure index. It has highest per capita generation of electricity in India, at 2.5 times the national average. All of Punjab's villages have been electrified and connected to the state electrical power grid since 1974.

  • Total road network 47,605 km
  • All cities connected by National Highways.
  • All major towns of adjoining states connected by National Highways.
  • Percentage of villages connected by metalled roads 97%
  • National highways: 1000 km
  • State highways: 2166 km
  • Major district roads: 1799 km
  • Other district roads: 3340 km
  • Link roads: 31657 km

Source: NCAER & Punjab Government[14] In addition to it, the State has nearly *100 percent electrification and nearly 100 percent potable water facility to the population of the State.

Data bank[edit]

Economic and Statistical Organisation Punjab (ESO), is the nodal statistical agency of State Government of Punjab. It act as data bank and provides statistics to various stakeholders on various socio economic issues of the State.

See also[edit]


  1. ^ a b c d e f g h "Punjab Budget Analysis 2019-20" (PDF). PRS Legislative Research. Retrieved 22 February 2019.
  2. ^ "India fares badly on global hunger index". Times of India. 15 October 2008.
  3. ^ a b "Punjab: Poverty, Growth & Inequality" (PDF). World Bank. 5 June 2017.
  4. ^ Best overall performance award to Punjab- Hindustan Times
  5. ^ "NRIs beat FDI, keep the money coming". Hindustan Times. 8 October 2012. Retrieved 9 July 2014.
  6. ^ India's 13 most debt-ridden states (Punjab economy soars to $21b by 2005-06)
  7. ^ Economy of the Federal States For Year 2011 & Population for Year 2011 Archived 24 July 2012 at the Wayback Machine
  8. ^ Punjab debt estimated at 62 per cent of GDP
  9. ^ Agriculture Punjab, India
  10. ^ Agriculture In Punjab - Facts and Figures
  11. ^ Green Revolution in India
  12. ^ Department of Agriculture, Government of Punjab, 2006
  13. ^ Power Suni System (P) Ltd. Retrieved on 2007-07-27
  14. ^ NCAER